CCIA Legal and Compliance Questionaire PDF

Legal and Compliance Issues for Community Currencies - Questionnaire -

Introduction: This questionnaire is intended to help the New Economics Foundation on behalf of CCIA to collect information from other community currency projects and organization about the existing knowledge, experiences and strategies concerning the impact of laws and regulations on the implementation, operation and scalability of community currencies. The input collected will support the production of a public document compiling and outlining of the current legal and compliance issues as faced by the different currency types in different countries.

We hope to cover all pertinent community currency types, including but not limited to: ● ● ● ● ● ●

(Legal-Tender) Backed (e.g. Bristol Pound, Sol Violette, Chiemgauer) Timebank/reward scheme with social focus (e.g. Spice) B2B mutual credit systems (e.g. Sardex, TradeQoin) B2B Closed Loop Payment Systems (e.g. WIR) Loyalty scheme/reward system with sustainable focus (e.g. ePortmonnee, Torekes) Local Fiat Currencies (e.g. Ithaca Hours)

with a focus on but not limited to these countries: ● United Kingdom, Belgium, France, The Netherlands, Ireland, Germany, Luxembourg We encourage and seek contributions for other countries and continents for a more comprehensive understanding and potentially produce more coherent policy recommendations.

Your responses will be compiled and used to generate a detailed report on the relevant regulations, laws and compliance issues and inform our future work. If you indicate to us that the information you submit is sensitive or confidential in nature, we will anonymise the information you submitted.

As part of the process, all responses that do not request privacy will be made available to all other respondents through Google drive. This will help you to see related issues elsewhere early on and potentially enhance individual contributions.

We know your time is precious, but we consider this a unique opportunity to compile this kind of information and we will make this shared learning available to all other practitioners worldwide. Please submit as much information as you can and/or send supporting documentation in any form that suites you to Leander.Bindewald@neweconomics.org

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How to complete this document: We have divided this document into several legal and compliance topics with their associated sub topics.

Overviews and examples are provided for each topic. Please fill-out: 1. Your name, association (if relevant), and which currency or which country(ies) you are providing responses on.

2. What the legal and compliance issues are for each sub-topic for the currency or currencies you are responsible for or that you are knowledgeable about, in the country, that you are familiar with.

3. Please try to include as many links and references to the original legal texts or resoureces as possible. Also add the contact details of the relevant authorities to support our search for further information.

Legal and Compliance Topics covered: 1.

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Taxation Insurance Labor Law Data Protection and Safety Financial Services Regulation Acceptance of Community Currencies

Your Name: [Please insert response here.]

Which Currency or Organisation and Country do you submit information about: [Please insert response here.]

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Legal Topics 1. Taxation Tax authorities and regulators can consider community currencies to be a means by which individuals and companies can more easily escape the tax implications of the transactions that they engage in. It is therefore vital that any community currency seeks to mitigate these legitimate concerns by addressing the impact on VAT, Corporation tax and Income tax of individuals and companies using the scheme.

For example, in the Netherlands a ruling has been obtained from the tax authorities that currency earned through social currency schemes are not taxed up to the equivalent of a maximum annual remuneration of volunteers up to â‚Ź1500. However the situation varies in the different NWE countries and for some similar policies are yet to be. A further challenge is designing a calculation model which allows for computing equivalent legal tenders for currencies that are circulated on a completely different basis such as ‘hours’.

To maintain the integrity of the community currency programs CCIA will do an in-depth risk analysis to understand how to mitigate the possibility of users avoiding paying all the tax due to the authorities. An initial assessment is, that social currencies (e.g. Timebanking, loyalty schemes etc.), due to their relatively limited scale in terms of individual balances and individual earnings, and spending opportunities, in general have a low risk of tax avoidance by users. For currencies in the professional/b2b mutual credit and legal backed tender, where the potential risks are higher, measures have already been implemented to verify the identity of participants when they enter the scheme. Your input here will help our further analysis of risk and development of adequate mitigation strategies.

1.1 Value Added Tax (VAT) How do community currencies comply with VAT law?

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Links to original law texts and contact details regulatory authorities relevant for this sub topic:

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1.2 Corporation tax How do community currencies comply with corporation tax laws?

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Links to original law texts and contact details regulatory authorities relevant for this sub topic:

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1.3 Income tax

How do community currencies comply with income tax law?

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Links to original law texts and contact details regulatory authorities relevant for this sub topic:

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2. Insurance Under this topic there are 2 sub-topics that will need to be investigated by the responsible partners.

Firstly the impact on volunteers engaging in work on behalf of the currency operator and related need for insurance. Secondly how the governance board will be indemnified against major risks.

In some cities/municipalities citizens engaging in volunteer work are covered by a municipal (accident/disability) insurance policy. There are, however, many municipalities where this not the case.

The partnership will need to assess this for all programs we develop, and, where necessary, negotiate favorable terms with insurance companies to provide coverage in the event no city-wide volunteer insurance exists.

The partners are required to research the appropriate/common arrangements for insuring volunteer work in their country. Please also indicate if city wide coverage exists at all, or in what ways institutions engaged in organizing volunteering ensure the required level of insurance.

Companies, charities, foundations and other entities (either profit or non-profit) who seek to introduce a currency scheme will need to consider the issue of potential liability of governance board members in the case of default, bankruptcy or other eventualities. In some countries (e.g. NL), insurance products for this type of liability are available (as long as the liability is not a result of e.g. illicit activities).

For insurance companies the risks involved in running a community currency scheme may not be straightforward to assess, which means a negotiation can be required to agree upon the appropriate insurance policy.

2.1 Volunteer insurance (accident/disability) How do community currencies ensure that they provide volunteer insurance?

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Links to original law texts and contact details regulatory authorities relevant for this sub topic:

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2.2 Liability of board How do community currencies limit or indemnify the liability of the currency governance board?

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Links to original law texts and contact details regulatory authorities relevant for this sub topic:

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3. Labor law One of the main target groups for social currencies are vulnerable an excluded strata of society, such as people with disabilities, the unemployed and people in deprived communities generally. Many of the people that can be (re)engaged and could participate in a social currency scheme are recipients of government/municipal welfare or (unemployment) benefits. For them to safely participate it is important that a dialogue is started and rulings are obtained on the potential impact of participation in social currency schemes from the relevant national and local authorities in the countries in which we implement them.

3.1 Social security How do community currencies ensure that users understand the social security implications of participating?

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Links to original law texts and contact details regulatory authorities relevant for this sub topic:

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3.2 Unemployment and disability benefits How do community currencies ensure that users understand the unemployment or disability benefit implications of participating?

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Links to original law texts and contact details regulatory authorities relevant for this sub topic:

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3.3 Employment Terms Do community currencies that you are knowledgeable about offer the possibility to (partly) pay wages or other employment benefits with community currencies? If so, how does this relate to legislation regulating the benefits/terms of employment in your country?

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Links to original law texts and contact details regulatory authorities relevant for this sub topic:

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4. Privacy and safety Data protection is an important topic for most network services. Within CCIA project partners will be responsible for formulating and implementing privacy policies to protect sensitive user data. The safety protection of individuals is embedded in several legal texts. We would like to see how these apply to the selected currency types. For example do we deal with registered offenders who want participate in currency programs? In addition there are specific regulations for working with the elderly and children 4.1 Safety/Protection of (vulnerable) CC users How do community currencies ensure the safety and protection of (vulnerable) CC users?

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Links to original law texts and contact details regulatory authorities relevant for this sub topic:

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4.2 Data storage and protection How do community currencies comply with data protection legislation?

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Links to original law texts and contact details regulatory authorities relevant for this sub topic:

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5. Financial service regulations Any organization that prints physical ‘money’, or vouchers, makes electronic monetary units available, that are convertible into legal tender or is engaged in the provision of payment services will need to review how the relevant financial services regulations apply to their currencies and which enforcement bodies (Central Banks, National and international Finance institutions) need to be engaged with for compliance or exemptions.

All countries have very strict laws restricting who can print money and currency operators will need to ensure that they do not contravene these rules. The provision of the electronic money directive and payment services directive only apply to those currencies that are not able to show that they operate in limited network. But more general rules and laws might apply, for example for the issuance of paper notes.

5.1 Issuing physical currency How do community currencies comply with the legislation covering the printing of physical notes?

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Links to original law texts and contact details regulatory authorities relevant for this sub topic:

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5.2 Digital currency non-convertible to national currency How do community currencies comply with the requirements of the legislation around using nonconvertible digital money – such as payment services regulations?

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Links to original law texts and contact details regulatory authorities relevant for this sub topic:

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5.3 Digital currency convertible to national currency (if applicable) How do community currencies comply with the requirements of the legislation around using convertible digital money – such as payment services regulations and E-money directive?

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Links to original law texts and contact details regulatory authorities relevant for this sub topic:

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5.4 Money laundering How do community currencies comply with anti-money laundering legislation?

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Links to original law texts and contact details regulatory authorities relevant for this sub topic:

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5.5 Other central bank oversight regulations How do community currencies comply with the requirements of the Central Bank or Financial regulator?

[Please cover all currency types and countries that you have experience or knowledge of ]

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Links to original law texts and contact details regulatory authorities relevant for this sub topic:

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6. Acceptance of CCs Being accepted in lieu of legal tender particularly by public entities is the goal of many CCs. Municipalities accepting local currencies for both services (swimming pool, public transport etc..) and taxes (business rates, local taxes) gives CCs greater use value and credibility. However, especially in the Eurozone, those who tried to establish such spending possibilities in different countries encountered barriers of different kind, sometimes of personal nature (risk averseness) sometimes allegedly due to regional procedure regulations, state law or even EU law.

6.1 Acceptance of CCs for municipal services and taxes Have community currencies faced any legal challenges to having their currency accepted for municipal services or taxes? If yes, what were they, and did you verify the validity of the claim?

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If you know of currencies who have managed to get their currency accepted for municipal services or taxes please explain in detail how that was achieved:

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Links to original law texts and contact details regulatory authorities relevant for this sub topic:

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